EU electric vehicle market plays central role in automotive steel consumption

European sales of Chinese-made cars grew by 45% in 2023, accounting for 4% of the market. The European Commission believes that the market share of Chinese cars could rise to 15% by 2025. In 2020, China exported about a million cars. This year, about six million cars are expected to be exported to more than 140 countries, which will exceed the volumes of the current world leader, Japan.
The long-term outlook for steel demand from the European automotive sector is becoming a major driver of demand. Despite new vehicle registrations rising 4.4% in the first quarter of 2024 to nearly 2.8 million units, registrations fell 5.2% in March, with declines in the region's four largest markets: Germany (-6 .2%), Spain (-4.7%), Italy (-3.7%) and France (-1.5%).

Some respondents to the May edition of the European Steel Review reported that steel orders in the automotive sector were down 10-20% year on year. Despite reports that a ban on trade in Russian metals on the LME and CME (including zinc) could put upward pressure on galvanized steel used by many OEMs, contract negotiations with automotive steel buyers are dragging on. They are targeting lower prices as the recent trend of lower steel prices has widened the gap between the spot market and contract prices.